Bad Candidate Experience: Why It’s Bad for Business

This is the first of two articles that will explore why candidate experience and candidate engagement are so crucial for staffing and recruiting firms, what makes for bad candidate experience, and how firms can turn the tide and deliver a great candidate experience that drives business results.

Every business professional knows this to be true: delivering great customer experience is crucial for success. And the consequences of delivering a bad experience are well-documented.

Studies show 95 percent of people have taken some action as a result of a bad experience with a company. Ninety-five percent of unhappy customers tell others about their experience—often via social media. Worse than that, a bad customer experience impacts retention and revenue directly, with studies showing as many as 82 percent of customers who’ve stopped doing business with a company because of a bad experience.

Do the same principles hold for a candidate’s experience with a staffing firm? The answer is, unequivocally, yes.

For recruiters, talent is the equivalent of customers for a company. Nearly 60 percent of job seekers have had a poor candidate experience, according to CareerArc. What’s the “candidate experience” really about? It’s the continuum of interactions, touchpoints, and various other ways in which the company, recruiters, and hiring managers engage with candidates throughout the entire candidate journey.

Interestingly, there’s a significant gap between how firms perceive they’re doing at delivering a great candidate experience vs. those who actually measure it and know exactly how they’re doing. Eighty-six percent of firms think they’re doing an excellent or good job at candidate engagement, but less than 50 percent actually measure how they are doing, according to Bullhorn’s 2017 North American Staffing and Recruiting Trends Survey.

Engaging candidates and creating a great experience for them matters a lot for staffing firms. Here are 5 reasons you don’t want to mess it up.

You’ll lose product or service revenue if candidates stop doing business with your firm.

Forty-one percent of global candidates who believe they’ve had a negative (1-star) experience say they’ll take their alliance, product purchases, and relationship elsewhere, according to The Talent Board’s 2016 Candidate Experience Research report.

This finding is validated by a widely-publicized report about the cost of poor candidate experience to Virgin Media, produced byemployer branding agency Ph.Attraction. According to the study, poor candidate experience cost Virgin Media £4.4M in 2014 ($5.5M U.S.). More than 130,000 candidates applied for jobs at Virgin Media that year, 18 percent of whom were existing Virgin Media customers. Due to bad candidate experience, more than 7,500 canceled their subscriptions and switched to a competitor.

While the volume of candidates for your firm or clients isn’t like that high, if 20-30 percent of candidates for a B2C business has a negative experience, the cost of lost revenue is still substantial.

Conversely, 64 percent of job seekers who give a positive 5-star rating will increase their involvement with an employer.

People go online and tell others about their bad experience and dissuade others from using your firm.

People who have a bad customer service experience spread the word with others, and job candidates do the same thing.

According to CareerArc, of those job seekers who’ve had a poor candidate experience, 72 percent say they’ve shared that experience online via an employer review site, such as Glassdoor; a social networking site; or directly with a colleague or friend. Nearly 60 percent of employers have read at least one piece of online negative feedback about their applicant process. Tellingly, 70 percent of the employers who’ve not yet seen negative candidate reviews admit to never having searched online to check if any exist!

And bad word-of-mouth has bad revenue consequences. Nine percent of those who’ve had a bad candidate experience go out and tell others not to purchase products or services from the company. The flipside: candidates share positive recruiting experiences with their friends, family, and peers over 81 percent of the time.

People won’t reapply for jobs, and they tell their friends to keep away.

When candidates have a bad experience in the interview or hiring process, they clearly become jaded about the prospect of applying for another position. Just 15 percent of those who had a negative experience (1-star rating) were likely to reapply for another position with the company, according to the Talent Board’s Candidate Experience Research report. This means you’ll miss the chance to hire the remaining 85 percent of those candidates in the future. What’s more, 42 percent of candidates who were dissatisfied with how their application was handled by an employer would never seek employment at that company again, according to CareerBuilder’s research.

If a bad experience means competent and qualified people who were interested in working for a company won’t reapply for other jobs, you’ll inevitably see delays in filling positions and increases in the cost of hiring. In contrast, the Talent Board found that 96-98 percent of candidates who had a positive candidate experience (4-5 star rating) are likely to reapply.

Beyond the impact on candidates who considered a firm, a substantial number of candidates – 22 percent of those who have a negative experience – will also go off and tell friends and colleagues to not apply at the firm. With highly desired talent often found via referral networks, this diminishes the pool of available candidates. In contrast, 96-98 percent of candidates who had a positive experience (4-5 stars) would refer someone else to work at the company.

There’s a steep cost of open positions and potentially higher costs of hiring.

The longer it takes to fill a position, the greater the time burden and cost are on the hiring manager. Hiring managers have to spend more time interviewing and recruiting at the expense of doing their regular day-jobs. Plus, recruiters have to spend more time finding candidates.

But an even greater hit is the lost productivity and value from an unfilled position and a vacant seat. Existing employees may be tapped out or stressed because they have to work harder to pick up the load. If it’s a revenue-producing job, then revenue will be lost along with potential market share or share of wallet for the customer base served by the position.

Moreover, if a company or staffing firm’s brand reputation is in any way diminished, the cost to hire talent goes up. Research by LinkedIn shows that a failure to invest in employer branding can cost companies considerably. LinkedIn’s VP of Talent Solutions, Wade Burgess, shared findings in his article, “Research Shows Exactly How Much Having a Bad Employer Brand Will Cost You.”

Using a combination of Linkedin research results, publicly available salary data, and typical turnover rates, they found the results “pretty staggering”:

The cost of a bad reputation for a company with 10,000 employees could be as much as $7.6 million in additional wages. Based on an average U.S. salary of $47,230 (according to BLS), it assumed an annual turnover of 16.4 percent, and a minimum 10 percent pay rise.

Employers who fail to invest in their reputation could be paying up to an additional $4,723 per employee hired.

Nearly half of U.S. professionals would entirely rule out taking a job with a company that exhibited the top three negative employer brand factors, no matter what pay raise they were offered.

For companies that don’t invest in creating a great candidate experience and engaging candidates, there’s often pressure to fill positions and hire people who end up being below-average performers. This can have a significant impact on the company and it can be felt in any of a variety of roles—especially sales or customer service, but also product development, marketing, or even lower-level administrative jobs where the under-performance of staff brings down the productivity of senior managers and team members.

It’s easy to calculate the cost of hiring an individual “underperformer” by using the average revenue per employee of the company.

At Starbucks, the average revenue per employee is $89,562. At Target, it’s $200,274. At Google it’s $1,154,896. If underperformers produce 10 percent below the level of an average employee, then the cost of hiring one below-average performer is about $9,000 for Starbucks, $20,000 for Target, and $115,000 for Google. And the costs of underperformance show up in poor customer service interactions, job-related errors, delays in delivering work product, and other areas. In contrast, the Corporate Executive Board found that having a strong employer brand can “increase your quality of hire by 9 percent.”

It’s clear that bad candidate experience can cost your firm significantly. And given that increasing profitability and driving revenue are the top two priorities for firms in 2017 amidst an ongoing talent shortage—candidate acquisition and sourcing was the #3 priority, according to the 2017 North American Staffing & Recruiting Trends report—it’s no wonder why leading firms are prioritizing their efforts to create a great candidate experience.

Want to learn about the top ATS features to look for in an applicant tracking system? Check out theATS Buyer’s Guide for everything you need to know to make a worthwhile investment in your staffing firm’s future.

Categories

Categories

Search

Search

We understand that it’s not business as usual for staffing professionals at this time. Bullhorn is committed to enabling you to continue to provide a positive experience for your candidates and clients.

ABOUT BULLHORN

Bullhorn is the global leader in software for the staffing industry. More than 11,000 companies rely on Bullhorn’s cloud-based platform to power their staffing processes from start to finish. Headquartered in Boston, with offices around the world, Bullhorn is founder-led and employs more than 1,000 people globally. To learn more, visit www.bullhorn.com or follow @bullhorn on Twitter.

Get Your Price Quote Today

Call us to schedule a demo. (888) 465-4838

Thank you. We will be in touch shortly!

Jonathan Novich

SVP of Product and Salesforce

Jonathan Novich is SVP of Product and Salesforce for Bullhorn, the global leader in CRM and operations software for the recruitment industry. A staffing technology innovator, he has developed broad and deep product and technical experience consulting to staffing firms over the past 15 years. Jonathan has acted as an independent consultant for some of the largest staffing companies in the world and advised companies on acquisition targets.
At Bullhorn, he oversees product initiatives as more than 10,000 staffing companies rely on Bullhorn’s cloud-based platform to drive sales, build relationships, and power their recruitment processes from end to end. He graduated with honors from Princeton University, earning a Bachelor of Science in Engineering in Computer Science and a certificate in Operations Research.

Ed Holmes

SVP, Workforce & Revenue Cloud

As Bullhorn’s SVP of Workforce & Revenue Cloud, Ed drives the company’s middle office strategy and overall product offering. Ed joined Bullhorn as part of the Peoplenet acquisition where he spent 7 years as the President/CEO leading up to the acquisition in late 2017. Prior to joining the Bullhorn family, Ed has spent his career designing, building and managing technology solutions for numerous Fortune 500 companies. He has been a Partner in an ERP-focused consulting firm, a CIO for a global pharmaceutical company, a supply-chain leader for a retail company and the leader of a services company from its inception to $50MM in revenue. Ed was born in Florida but has spent the last 20+ years in Atlanta, GA. Ed loves to play golf, tennis and basketball and occasionally gets out kite boarding when the wind is just right.

Ed holds a Bachelor of Science in Industrial and Systems Engineering from the Georgia Institute of Technology and an MBA from Goizueta Business School at Emory University.

Brian Sylvester

CFO

Brian Sylvester is Bullhorn’s Chief Financial Officer (CFO) with more than 15 years of financial leadership experience. Brian leads Bullhorn’s financial, accounting, and legal functions. Prior to becoming CFO, Brian spent three years at Bullhorn in various finance & accounting roles. Prior to Bullhorn, Brian was Corporate Controller at Pegasystems, a global provider of business process management software where he scaled the finance organization during a period of 2.5x revenue growth. Brian began his career at PricewaterhouseCoopers in their technology audit practice.

Brian is a CPA in Massachusetts, has a Master’s of Science in Accounting from Boston College and a Bachelor’s of Science in Accounting from Bryant University.

Tamsyn Attiwell

SVP, Customer Success

As the Senior Vice President of Customer Success, Tamsyn leads Bullhorn’s Services and Customer Success teams. She is responsible for the successful delivery of all products and services globally and is committed to creating and maintaining incredible long-term customer experiences in the Candidate to Cash process. Tamsyn has been delivering implementations for over 25 years with companies such as SAP, Ariba, Zuora and Apttus: specializing in HR, Payroll, Procurement and Quote To Cash capability. She trained as a software engineer after studying Maths, Statistics, and Computing in England.

Art Papas

Founder & CEO

Art Papas is the Founder and CEO of Bullhorn, Inc, the global leader in software for the staffing & recruitment industry. Art was the original architect of Bullhorn’s flagship Customer Relationship Management (CRM) system, which now helps more than 8,000 companies around the world run their businesses. Art is the Chairman of the Board at Career Collaborative, an organization that teaches unemployed and underemployed adults how to build careers that change lives and strengthen families. In 2014, Ernst & Young named Art an EY Entrepreneur of the Year Award Winner in New England. Prior to starting Bullhorn, Art started his career as a software engineer at Thomson Reuters. Art is a graduate of Tufts University, holding a Bachelor of Science degree in Mathematics.

Matt Fischer

President and Chief Technology Officer

As President and CTO, Matt leads Bullhorn’s architectural, technical, and software design and development efforts. He also directs the product management team’s work defining product strategy, and global customer support and success. Since joining Bullhorn in 2004, Matt has held a variety of leadership positions managing the growth of various technical and services teams, including Vice President of Professional Services. Prior to Bullhorn, Matt worked at PricewaterhouseCoopers, specializing in systems process assurance for such companies as Fidelity and State Street Global Advisors. Matt holds a Bachelor of Science in Business Administration with a concentration in Finance from Boston University’s School of Management.

Mike Restivo

Chief Revenue Officer

As Bullhorn’s Chief Revenue Officer, Mike drives the company’s global revenue growth. Mike was one of the first 15 team members of Bullhorn Inc. in Boston and relocated to London in 2010 to start up the International team. In his 6 years in London, Mike drove regional expansion into the Netherlands, Germany, Singapore, and Australia. He has supplied cloud-based solutions to recruitment consultancies in over 50 different countries worldwide for the past 10 years. Mike was born and raised in the Boston-area where he grew up an avid sport fan. He earned his Bachelor of Science in Business Management from Babson College.

Kristin Machacek Leary

Chief People Officer

Kristin oversees Bullhorn’s human resources function in her role as Chief People Officer. Kristin joined Bullhorn in 2020 and is responsible for helping Bullhorn scale to the next level, build leadership capacity, and accelerate growth in global markets. Kristin brings to the role over 20 years of experience leading high-potential companies through breakthrough growth and brings a depth of knowledge in organizational design, scalable processes, and flexible systems culled from some of the most successful global companies in the world. Leary joins Bullhorn from Hitachi Vantara, where she served as Chief Human Resources Officer, and before that she worked as Chief Human Resources Officer at Forcepoint, a private equity-backed company with 3,000 employees operating in more than 45 countries. She has also worked at high-growth enterprise technology companies like Alphatec Spine, Boston Scientific, and Hewlett-Packard.

Peter Linas

Executive Vice President of Corporate Development and International

Peter oversees Bullhorn’s international operations across EMEA and APAC in his role as Executive Vice President of Corporate Development and International. Peter joined Bullhorn in 2009 and was responsible for its highly successful UK launch. In addition to growing the international team to over 50 staff and establishing Bullhorn as the UK’s market leading recruitment software in fewer than three years, Peter has expanded Bullhorn’s reach into EMEA and APAC and achieved a user base of more than 10,000 international users. Prior to taking on the launch of Bullhorn in the UK, Peter spent 20 years working in the recruitment industry and held a number of senior director roles before moving into the technology space.

Ryan Murphy

Executive Vice President of Enterprise and Salesforce

Ryan Murphy is the Executive Vice President of Enterprise and Salesforce. He began his 10-year career at Bullhorn as a finance and sales intern, affording him a 360-degree view of the software-as-a-service industry and Bullhorn’s business model. Prior to his current role, Ryan served as an Enterprise Account Executive where he honed his customer-first leadership style and championed Bullhorn’s offerings to its most strategic clients. Today, Murphy is charged with leading the enterprise strategy and go to market for both Bullhorn and Bullhorn for Salesforce, enabling customers to maximize their investments on both platforms and deliver an incredible experience to their customers and candidates. Ryan has a Bachelor of Arts in Business Administration from Boston University.